The New Zealand Dollar (NZD) fell against the US Dollar (USD) on Wednesday during Asian session, dragging the price of NZDUSD to less than 0.7050 following the release of some key economic news from the United States. The technical bias remains bullish because of a Higher High in the recent upside rally.
As of this writing, the pair is being traded near 0.7018. A hurdle may be noted near 0.7054, the intraday high of yesterday ahead of 0.7100, the psychological level.
On the downside, the pair is likely to find a support near 0.6968, the high of the last upside rally which is now acting as a critical support level ahead of 0.6871, a major horizontal support area as demonstrated in the above daily chart. A break and daily closing below the 0.6871 could incite renewed selling pressure, validating a move towards the 0.6600 support area in the long run.
US Housing Data
U.S. housing starts fell more than expected in March and permits for future home construction hit a one-year low, suggesting some cooling in the housing market in line with signs of a sharp slowdown in economic growth in the first quarter. Groundbreaking decreased 8.8 percent to a seasonally adjusted annual pace of 1.09 million units, the lowest level since October, the Commerce Department said. Economists polled by Reuters had forecast housing starts slipping to a 1.17 million-unit pace last month.
Last month’s drop in starts pointed to a moderation in housing market activity and mirrors other reports on business spending, industrial production, trade, inventory investment and retail sales that have suggested economic growth stalled in the first quarter.
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy if we get a valid bearish reversal candle on four-hour timeframe.
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